Business | General
Kraft's game of cat and mouse turns bitter
Analysts say Kraft's value will come under closer scrutiny
- Financial Times
- Published: 00:00 November 11, 2009
- Image Credit: Source: The companies, AP/Gulf News
- Kraft piles pressure on British firm to justify standalone valuation.
London: Cadbury's board took less than an hour on Tuesday to issue a tart statement condemning Kraft's hostile offer, signalling it is preparing a staunch defence of its prospects as a stand-alone company in the months ahead.
"Kraft's offer does not come remotely close to reflecting the true value of our company," said Cadbury chairman Roger Carr, adding the company's board had "strengthened its resolve to ensure the true value of Cadbury is understood by all."
With Cadbury's board having already received support in early September for its rejection of a bid valued at 745 pence (Dh45.55) a share, people close to the company expressed surprise that the US food group made no attempt to lift the value of its offer, and suggested that Kraft was biding its time to see if its stock price would rise — putting it in a stronger position to make a higher offer towards the end of the formal takeover period.
Optimum premium
One person said: "Today she [Kraft chief executive Irene Rosenfeld] has paid an option premium for the next two-and-a-half months to see if she can regain some strength with her shareholders."
Analysts, who say Kraft's value will come under closer scrutiny, took a similar view.
"I'm a little surprised they didn't at least maintain the value of their initial offer," said Martin Deboo, analyst at Investec, adding that the increase in Cadbury's earnings guidance and the rise in the stock market since early September should have made Cadbury more attractive to Kraft.
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